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A buyer for British Steel is welcome but what’s Jingye’s strategy?

It’s hard to see why the Chinese firm wants to take over a loss-making business in a tough market.


Half the woes for steelmakers in Britain derive from dumping into world markets by Chinese producers, or so we have been told for a couple of decades. So it is a strange sort of rescue for British Steel that ownership should pass to a little-known Chinese conglomerate, Jingye, offering a vague promise to invest a large sum.

Any buyer is better than none, of course, since the effects of irreversible closure of the Scunthorpe steelworks would be appalling. Top of the list would be 4,000 jobs, with another 20,000 in the supply chain. Then there would be the huge environmental clean-up costs.

Jingye counts as a more credible owner than Greybull Capital, the private equity outfit that took British Steel into administration. Yet it is still hard to understand why a Chinese group, which is only the world’s 37th largest producer of steel, wants to own a loss-making producer on the other side of the world.


Tata Steel couldn’t make financial sense of what it called its “long products” business, so gave it away to Greybull for £1 in 2016. Industry conditions haven’t notably improved for high-cost European producers since then. The price of iron ore, of the two key raw materials, is high. And complaints about energy and environmental costs, the other half of the industry’s troubles, are constant.

Perhaps Jingye wants overseas assets to balance the volatility in its home market. Or perhaps it calculates that a purchase of British Steel will open up opportunities to export to the UK some of its current products. But those theories are speculative. This £50m purchase may just be a hopeful punt in which the downside risks are deemed tolerable.


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Sale of British Steel subsidiary to French firm protects 400 jobs

York-based TSP Projects will be folded into Systra, which will take on pension liabilities

A subsidiary of British Steel has been sold by the government to the French company Systra in a deal that protects 400 jobs.

The deal is not expected to have any impact on discussions on the rest of British Steel, as exclusive talks continue between the government’s official receiver, the state employee managing the sale, and Oyak, the Turkish military pension fund.

York-based TSP Projects, which designs and builds large rail infrastructure projects, will be folded into Systra. The proceeds of the sale are likely to be allocated to lenders to British Steel, which collapsed into liquidation in May.

Neither the government nor the companies disclosed the sale price but Systra will also take on TSP’s £70m pension liabilities, a hangover from the company’s days as a division of British Rail before privatisation.

Craig Scott, the chief executive of TSP Projects, said the liquidation of British Steel had never threatened his company, which was performing well and counted firms including Network Rail, Siemens and Costain among its clients.

“We would always have found a buyer,” said Scott. He added that he was “pleased to get out from the association with British Steel in administration and to be able to get on with focusing on our business. We’re moving to an owner where we’re part of their core business and it’s a permanent home.”

He said Systra and TSP Projects were growing, meaning that none of the company’s 400 jobs would be lost and more staff could be hired. “We do not have sufficient people to deliver the pipeline we have got coming, so together we need to grow,” he said.

TSP Projects has worked on projects such as the redevelopment of King’s Cross and Reading stations and is also working on infrastructure at Gatwick airport’s station and upgrades to the TransPennine Express rail route.

Most of its employees are based in York but it also has outposts in Birmingham, Manchester, Reading and Bristol.

Systra, an engineering group specialising in transport, is owned by the French state railway companies SNCF and RATP, which runs public transport in Paris, and a consortium of French banks.


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UK government agrees £300m rescue package for British Steel

The government has moved to rescue British Steel with a financial support package worth as much as £300m that ministers believe will be enough to secure backing from a private bidder.

It is understood that the Department for Business, Energy and Industrial Strategy (BEIS) has agreed to substantially increase support to bidders for British Steel, which employs more than 4,000 people, after months of wrangling following the company’s collapse into administration.

The rescue package will include beefed-up grants, indemnities and loans that could be worth as much as £300m, according to sources quoted by Sky News.


A Turkish pension fund is considered to be the frontrunner to takeover the company’s main plant in Scunthorpe and subsidiaries across Teesside, although a consortium which includes a leading civil engineering firm working in west Africa is also in the running after making a late bid.

Despite the late interest from elsewhere, the business secretary, Andrea Leadsom, is expected to approve exclusive talks with Ataer Holdings, a subsidiary of the Turkish military pension scheme Oyak. An announcement that Ataer has won preferred bidder status could be made by the government’s official receiver David Chapman and EY, which is managing the sale, as early as next week.

Ataer is believed to be the frontrunner after it committed to keeping all parts of the steel company together. While the plant in Scunthorpe makes up the vast majority of British Steel’s operations, the government has so far expressed a preference for selling the company as a single entity, including satellite operations in areas such as Teesside.


The government has already provided a £120m loan to British Steel to help meet its obligations under an EU carbon credits scheme for industrial polluters. Nevertheless, the firm is understood to be losing £5m a week.

The Guardian has approached EY and BEIS for comment.

Earlier this week, BEIS said: “This government will leave no stone unturned to get a good solution for British Steel at Scunthorpe, Skinningrove and on Teesside.”


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